Oregon shoppers required to pay sales tax at register

Washington
shoppers no longer will find themselves waiting in line at the register behind
Oregon residents wanting to avoid state taxes.

Oregonians
are no longer exempt from paying state taxes when they reach for their wallets
under a law signed by Washington’s Gov. Jay Inslee that took effect July 1.

To recoup
any sales tax expenses, Oregon residents now must file for a yearly refund from
the state Department of Revenue for any state sales taxes paid in excess of $25
annually.

For
decades, shoppers living over the state line to the south had avoided paying
sales tax at checkout time at stores in the Mid-Columbia by providing proof of
Oregon residency.

Sellers
of big ticket items like appliances are concerned about the new law.

“We have been here a long, long time, and we have sold to
Baker, La Grande, Hermiston, Pendleton all this time, and those people are
going to have to drive all the way to Portland now to buy appliances,” said Tim
Martin, sales manager for Bunch Finnigan Appliances in Kennewick. “It’s really
bad. We wrote up our last two Oregon customers on (June 29). They’re not going
to come here to pay the sales tax any more. They’re going to go to Portland.
It’s going to be cheaper to have them pay the freight.”

The
new law affects only the 6.5 percent state sales tax; no reimbursement of local
taxes will be allowed at the point of sale or by reimbursement. Local taxes in
both Benton and Franklin counties are 2.1 percent, which brings the total sales
tax to 8.6 percent.

The
removal of the sales tax exemption at the point of sale was included in the most
recent biennial budget Washington lawmakers passed in the spring.

The
Associated Press reports the change is estimated to bring in about $175 million
to the state through mid-2025, with $53 million expected for the 2020-21 fiscal
year budget cycle.

An
exemption is only available for tangible goods. Out-of-state residents can
never qualify for an exemption on services, meals or lodging.

Annual
refund requests are limited to one per person, per calendar year and must
include proof of total sales taxes paid in excess of $25.

Jody
White, owner of White’s Finished Furniture & Hardwood in Kennewicks, was
unsure how the tax exemption change would affect his business.

“I’m
going to flip a coin and I’m going to say it’s going to hurt for a little
while, just until the numbness wears off,” White said. “I just had a gentleman
in who bought wood and he lives down in Oregon and his exact words were, ‘Yeah,
I’m not coming to Kennewick to shop no more. But I’ll still come to you because
you have what I need.’ ”

Martin
estimates 15 percent to 20 percent of the appliance store’s customer base comes
from Oregon and he hopes that will continue.

“We
have a lot of loyal customers. We might get lucky and they’ll still keep
coming, but I really feel bad for Pendleton. Pendleton, La Grande and Baker
City, they’re a long way from anybody.”

Oregon is not the only state
without a sales tax, which means shoppers from Alaska, Delaware, Montana and
New Hampshire also no longer qualify for an on-the-spot exemption.